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(CNN)-- The Iran-backed Yemeni Houthi group has declared a naval blockade on Saudi navigation, an escalation that could reignite a dormant regional conflict and threaten global oil supplies.

Video footage broadcast by Reuters showed Houthi supporters gathering in the Yemeni capital Sanaa on Monday evening, praising the announcement of the naval blockade.

The Houthis, one of Iran's key allies in the region, have long warned they may take action to close the Bab el-Mandeb Strait, a strategic waterway at the southern tip of the Red Sea.

Closing this vital sea lane would cause major disruptions to global trade and increase volatility in oil markets.

The Bab el-Mandeb Strait, at the southern entrance to the Red Sea, is a key gateway to the Suez Canal, linking Europe and Asia via one of the world's busiest shipping routes. At its narrowest point, the strait is about 29 kilometers (18 miles) wide, and vessels traversing it have previously been targeted by Houthi attacks.

Approximately 15% of global maritime trade passes through the Bab el-Mandeb Strait. Shipping industry estimates suggest that navigation disruptions between 2023 and 2025 may have cost the global economy around $20 billion annually.

The strait is a major route for Saudi oil exports, as the kingdom is the world's largest exporter of crude oil, and the waterway has remained largely open to navigation throughout the war.